Moving from Colorado to Georgia - Taxes

[Rexsumus]

I am moving from Colorado to Georgia but will be working remotely for my company that is stationed in Colorado. Would I be double taxed on state-income tax or would I just need to file a non-resident tax form for Colorado?

[rjs]

If you live in Georgia for the entire year and work remotely for a Colorado company for the entire year, you will have to file a Georgia resident tax return. You will not have to file a Colorado tax return.

You will be living and working in Georgia, so all of your income will be Georgia income and you will pay Georgia tax on it. You will have no Colorado income, so you will not have to pay Colorado tax. A few states tax remote workers from other states, but Colorado is not one of them.

If you occasionally go to the company office in Colorado, any income that you earn for the time you are in Colorado will be Colorado income. You will have to file a Colorado nonresident tax return and pay Colorado tax on the income that you earn there. All of your income is also taxable by the state that you live in, no matter where the income is from. You will get a credit on your Georgia tax return for part or all of the tax that you pay to Colorado, to avoid double taxation.

When you move, make sure that your employer stops withholding Colorado tax and does not report any Colorado income on your W-2. Ask them if they can withhold Georgia tax. If not, you will have to make quarterly estimated tax payments to Georgia.

For the year that you move, you will have to file part-year resident tax returns for both states.

[rjs]

I want to add some additional comments about the year that you move.

For that year, you will have both Colorado income and Georgia income. The income that you earn while living and working in Colorado is Colorado source income and is subject to Colorado tax. The income that you earn while living and working in Georgia is Georgia source income and is subject to Georgia tax. Your W-2 will have a row of state information (boxes 15 - 17) for Colorado. It might also have a second row of state information for Georgia. You should discuss with your employer in advance, and try to make sure that the state wages in box 16 on the Colorado row include only the income that you actually earned in Colorado. If it shows more than the correct amount, it will be difficult and time-consuming to try to convince the Colorado Department of Revenue that the income shown on the W-2 was not all earned in Colorado. The same goes for Georgia wages, if shown on the W-2.

There should be no issue of double taxation as long as you only work in the state that you are living in at the time. You would not have any income earned in one state while living in another state. Therefore, neither state will give you credit for tax paid to the other state.